Nairobi, July 31 -- Bank stock valuations have fallen below their historical average as the shares take a hit from the Covid-19-led downturn, making their current prices attractive for buying.
Nairobi-based investment bank Genghis Capital says in a coverage note on six tier one lenders that it expects earnings for the year will drop by an average of 11.9 percent, mainly due to an increase in provisioning and depressed income growth from risk-off asset strategies and restructured loan books.
However, the analysts expect that in the long term there will be a recovery as the quality of loan books improves with the return to normalcy of the economy.
"While Return on Equity (RoE) will remain depressed in 2020, our long-term RoEs are expected ...